KPMG Quits as Herbalife Auditor After Disclosure

Herbalife says KPMG has resigned as its as auditor in connection with alleged insider trading in Herbalife involving a KPMG partner. Steven Russolillo reports. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... I ... is it like two thousand thirteen welcome to lunch break I'm Wendy downs accounting giant KPMG is officially out as Aunt into nutritional supplement maker Herbalife the connection ... with alleged insider trading this is the story are Markets teen yes is all over and join me now at Lynas's MarketBeat reporter ... Steve Russolillo ... more headaches for Herbalife mechanic is a summons earlier headaches in just a minute to list on the nuts and bolts of what we know behind KP ING's resignation today Nestle will keep you Jieqin out last night and disclosed that one of their partners they didn't disclose ... it was ... the case that one of the reasons above and in twenty insider trading says it won't be empty ... this came out last night CKE fleets of Bowman was somehow this could be connected to Herbalife is a lucrative are tracking this down and finally ... on the news came out the stock was halted for more than two hours in the news officially came out later this morning ... I've that the PNG has officially resigned ... as Herbalife's auditor here in connection with his insider trading allegations so there's still a lot of ... question marks right now is to ... you know what's going to be the broader ramifications for Herbalife what's going to the program cases for keeping Tebow great now we know is that he can tease out ... Herbalife is going to look for another auditor and Herbalife this is just another chapter ... in their ongoing saga between you know their hedge fund managers and is everything that's been going on there was no doubt that Herbalife is trading again the correct size XL Herbalife shares were halted for a little mirror that stand out and ... you can see the stock next Ina ... Domo legal awesomeness of the death of not that big blow to the people in a couple of shoulders of a top two so that this is more to keep Ian G D story ... as it has to Herbalife soy sauce that Herbalife doesn't have plenty of its own story on bad I which is sort of roll through that any ... allegations that you bought has been falling the combine a large short position Shayla that someone has begun to share price can ago down ... are a few companies based on a pyramid scheme I walked for people who have been on this ... through what these years of Bill Ackman is the isthe pre well-known hedge fund managers with comments that this company operates as an illegal pyramid scheme that the government should come in and shut the something done he thinks the stock should go to zero ... this is the base case scenario right now and and you know there's nothing illegal about what Bill Ackman stone sorts of short selling activity is legal here so ... you know that there is nothing wrong that other people now have come on the APUs it so I like Atkins that yet so Carl Icahn ... and Daniel Loeb ... Roger Chapman there's of bunch of pretty prominent players here with comments that you know ... Ackman is wrong with this and there are reasons why this company's sustainable Cummins come he's been around for more than thirty years and so ... there's no reason why the government would come in now and end of an illegal pyramid scheme because they aren't illegal to sleep so that's that ... that's the other side is the flipside incitement renouncing seen this constant ... jostling back and forth than you've seen ... notes just freeze the accusations being hauled around but like many different players around this one man who opens lead year-ago really was no pretty much unheard of at least on Wall Street exactly at ... the people who don't follow this day this type of thing day in and day out I'm like you too steep ... when you have a situation like this involving your although there was a big name I KPMG ... your company like what does it mean for a new book The headaches isn't present ... and and costs going forward yes that's a great question I mean it because now they're gonna have to find one in this is something that has just happened like Will to Lead recently because ... Herbalife without their their proxy filing last week saying key ING's underwear weren't working with them to the rest of the year the longer so this is something that Apple iPhone five is the isthe connector company had been a good whatever finishes the first quarter ... exactly so ... but clearly that's not the case at this point so ... for the Cub unlike Herbalife who was fighting so many accusations rate now this is this something else to layer on top of all that so ... clearly a headache for the company ... and could be a lot more than that as you mentioned you know that that is awesome and has more ... um you what people just working right at the situation in our thinking will contain a fall of the unfolding saga with that that's on debt and how to take a backseat to be appreciated